Judges

Attorneys and Parties

Brief Summary

Background

In 1994, the decedent (mother) transferred two properties to her daughter, Nancy (defendant), to avert foreclosure caused by obligations incurred to assist another daughter (Susan) and related obligors. Under a written agreement, Nancy would mortgage the properties, and the obligors would repay her in full—covering the mortgage, repair and maintenance (net of rent), and all closing costs—after which Nancy would reconvey the properties to the decedent. In case of default, Nancy could sell or keep the properties after providing 30 days’ notice to permit a cure. All parties had counsel. The mortgages were satisfied in October 2017; the decedent died in February 2018. In 2019, the decedent’s son, George (administrator), sued for breach of contract (seeking reconveyance), accounting of rents, conversion, and waste, and filed notices of pendency. During discovery, defendant served an August 8, 2023 notice of default asserting unpaid 1994 closing costs and large interest/tax/insurance add-ons. Plaintiff cross-moved to amend to add a constructive trust claim.

Lower Court Decision

The Supreme Court, Suffolk County (Nolan, J.), granted defendant’s motion for summary judgment dismissing the complaint, cancelled the notices of pendency pursuant to CPLR 6514(a) [authorizes the court to cancel a notice of pendency, including where the action does not affect title to real property or where other statutory grounds are met], and denied plaintiff’s cross-motion to amend to add a constructive trust claim. Judgment entered July 11, 2024 reflected those rulings.

Appellate Division Reversal

The Appellate Division dismissed the direct appeal from the April 11, 2024 order because it was subsumed in the appeal from the July 11, 2024 judgment (see CPLR 5501[a][1] [permits review, on an appeal from a final judgment, of prior nonfinal orders that necessarily affect the judgment]). On the merits, the court affirmed the judgment. The majority held that payment of closing costs was an express condition precedent to any reconveyance, requiring literal performance; Susan admitted the closing costs were never paid. Plaintiff failed to raise triable issues as to waiver (no clear manifestation of intent), frustration, or substantial performance. Accounting failed because plaintiff lacked an interest in the properties; conversion was duplicative of contract; and no trustee relationship supported the waste claim. Leave to amend to add a constructive trust was properly denied as patently devoid of merit due to a valid enforceable written contract governing the subject matter. Barros, J.P., concurred in part and dissented in part, opining that triable issues existed regarding the sufficiency and timing of the default notice, claimed waiver/laches, rent offsets, and that leave to add a constructive trust should have been granted.

Legal Significance

Confirms that in New York, expressly stated conditions precedent in a written real estate/family agreement must be strictly performed before equitable remedies like reconveyance are triggered; conclusory assertions of waiver or frustration will not defeat summary judgment absent a clear manifestation of intent or evidence of prevention. It also underscores that an accounting requires a cognizable property interest, conversion cannot duplicate contract claims, and constructive trust claims will be rejected where a valid written contract controls the subject matter. Notices of pendency may be cancelled when the underlying claims fail to affect title (CPLR 6514[a]).